Tuesday, May 29, 2012

Quick technical note: I've finally gotten around to moving the domain name for the site (i.e. www.angrybureaucrat.com) away from Godaddy, which I've been meaning to do for a long time. The good news - the transfer is underway. The bad news - the site seems to be unavailable at the main address (www.angrybureaucrat.com) while the transfer is underway.

I think the RSS feed is still working, so I wanted to post this to let regular readers know that the site will be back up as soon as the domain name transfer completes, which I hope will be very soon, but it's rather out of my hands.

So last year around this time, I accepted an invitation to address the Economic Club of New York. I went up there and said that in my view, the debt limit exists in statute precisely so that government is forced to address its fiscalissues.

Yes, allowing America to default would be irresponsible. But it would be more irresponsible to raise the debt ceiling without taking dramatic steps to reduce spending and reform the budget process.

We shouldn’t dread the debt limit. We should welcome it. It’s an action-forcing event in a town that has become infamous for inaction.

That night in New York City, I put forth the principle that we should not raise the debt ceiling without real spending cuts and reforms that exceed the amount of the debt limit increase.

From all the way up in Midtown Manhattan, I could hear a great wailing and gnashing of teeth. Over the next couple of months, I was asked again and again if I would yield on my ‘position,’ what it would take, if I would budge…

Each and every time, I said ‘no’ … because it isn’t a ‘position’ – it’s a principle. Not just that – it’s the right thing to do.

When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase. This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance.

Wow ... just ... wow.

This is such a SELF-EVIDENTLY AND PROFOUNDLY STUPID IDEA that I barely have the ability to contain myself to type out a semi-intelligent response, as I'm pretty sure that even hearing an idea that stupid has lowered my intelligence - though only temporarily, I hope.

The last time the Republicans did this, they earned the U.S. its first credit rating downgrade ever. Obama took an approval ratings hit, but Congress took a far bigger hit, and independents blamed most of the debacle on the Republicans. I find it hard to believe that it's wise for the Republicans to want to go through this again.

So, the Republican Congress is yet again proving that it is full of crazy people and it's led by someone who's willing to act like a crazy person, even though I'm pretty Boehner isn't as dumb as he's currently acting.

But why is Boehner acting so crazy?

Because (on the bright side, as I explained in November) the Congressional Republicans have painted themselves into a corner. While they succeeded in extracting some serious spending cuts in order to raise the debt ceiling last time, many of those spending cuts come from the defense budget, starting on January 1, 2013. Republicans had been hoping to simply undo those cuts without paying for them, but thus far, Obama has said he won't allow them to do it. Second, the Bush tax cuts are set to expire ... on January 1, 2013. The combination results in $6 trillion in deficit reduction, distributed far more progressively than any proposal ever advanced by either the Democrats or Republicans, since half of the spending cuts come from military spending, and increased revenue outmatches spending cuts by a 3:1 ratio.

This is a situation the Republicans are desperate to avoid, so they're using the only tool left in their box - a gun, held to the head of the American economy, and they're threatening to pull the trigger in early 2013 when the debt ceiling needs to be raised again, if they don't get their way.

I hope Obama has the good sense not to try to negotiate with the Republicans this time. Instead, Obama should invoke one of the many options available to him to abolish the debt ceiling entirely, either by law or in practice:

Preemptively sue Congress over the issue and force the Supreme Court to decide whether it's constitutional for Congress to pass budgets on the one hand and then refuse to pay for them on the other hand. On it's face, it's stupid that Congress is allowed to do that, and I'd hope that the Supreme Court would agree, but who knows - the Supreme Court has been making all kindsof bad, stupiddecisionslately.

No matter what happens, this episode confirms the fact that one of the two major parties has been taken over by ideological extremists bent on imposing their policy agenda regardless of the harm they cause to the poor, the middle class, the elderly, the sick, the environment, and the American economy in general. And those aren't my words - they're the words of a conservative American Enterprise Institute scholar.

It's almost enough to make me start looking for jobs in a country where the leaders aren't crazy. However, Europe's economic policy has been even worse than America's as of late, so I'm not sure where that leaves me to move to - I'm not going to subject myself to the whims of any country that isn't fully democratic. So, where does that leave ... South America, perhaps? Any suggestions?

P.S. As I said a couple of days ago, I'll be traveling until after Memorial Day, so no new posts until then. Check out the archives, and have a good couple of weeks!

The fact that the U.S. government can borrow money for cheaper-than-free, even after the ratings downgrade, comes about from a combination of two factors (and no, I have no idea what the relative strength of each factor is in the mix):

There is not enough U.S. debt to satisfy the market's appetite for U.S. debt. Since there's not enough supply to meet demand, the price of U.S. debt (which is inverse to the interest rate) increases.

The market thinks that the long-term growth prospects of both the U.S. and world economies are dismal. A negative real 10-year interest rate says that investors are expecting a "lost decade."

The bad thing about cutting the federal deficit is that unemployment is very high and interest rates are very low. Given that, taxing productive activity to pay down debt is really obviously the wrong thing to do, and borrowing money to employ currently unemployed resources is really obviously the right thing to do.

Obviously, I would advocate putting money towards productive uses (rebuilding infrastructure, research and development, etc.) and towards programs that have large economic multiplier effects (food stamps, unemployment benefits, WIC, etc.), since those activities would stimulate demand and the economy now, while also laying the foundations for increased growth in the future. But, from an economic point of view, the government should just be borrowing and doing ANYTHING with the money, since it's cheaper-than-free - right now, borrowing money to give huge (temporary) tax refunds to everyone or even just hiring unemployed people to dig holes and fill them back up again would be a net economic gain.

The bottom line is, the U.S. should be borrowing and spending way more money in the short-term in order to boost growth and decrease unemployment, but both Congress and the White House are focusing on the totally wrong issues (i.e. cutting spending). And the most frustrating thing is that at least the White House knows better - Robert Reich, talking to people in the administration, says that there has been a deliberate decision to focus on the wrong issues, knowing that they’re the wrong issues:

So rather than fight for a bold jobs plan, the White House has apparently decided it’s politically wiser to continue fighting about the deficit. The idea is to keep the public focused on the deficit drama – to convince them their current economic woes have something to do with it, decry Washington’s paralysis over fixing it, and then claim victory over whatever outcome emerges from the process recently negotiated to fix it. They hope all this will distract the public’s attention from the President’s failure to do anything about continuing high unemployment and economic anemia.

Sigh ... it's now several months later, and nothing has changed. One begins to wonder if the people in Congress have the intelligence to learn from their past mistakes, and/or to observe the world around them.

[Personal note: I'm traveling again as of Thursday. I may try to throw up another post before then, but if I don't manage it, there will be no more posting until after Memorial Day. In the meantime, enjoy the archives, and take care of yourselves!]

The darker and more numerous the squares, the more equal gay citizens are in the eyes of the law.

Obviously, that's just a partial screenshot - click here to go to the interactive version and learn in-depth about each state's treatment of its gay citizens. DC does very well - not surprisingly, my birth state of TN does not.

Norman J. Ornstein, resident scholar at the conservative American Enterprise Institute and Thomas E. Mann, senior fellow at the centrist Brookings Institution 1) detail the central reason that the U.S. is failing to meet the biggest challenges facing the country today (hint: it's the Republican party) and 2) take the media to task for trying to maintain false balance in media coverage in a world where there is no balance between the two sides of a debate.

Rep. Allen West, a Florida Republican, was recently captured on videoasserting that there are “78 to 81” Democrats in Congress who are members of the Communist Party. Of course, it’s not unusual for some renegade lawmaker from either side of the aisle to say something outrageous. What made West’s comment — right out of the McCarthyite playbook of the 1950s — so striking was the almost complete lack of condemnation from Republican congressional leaders or other major party figures, including the remaining presidential candidates.

It’s noat that the GOP leadership agrees with West; it is that such extreme remarks and views are now taken for granted.

We have been studying Washington politics and Congress for more than 40 years, and never have we seen them this dysfunctional. In our past writings, we have criticized both parties when we believed it was warranted. Today, however, we have no choice but to acknowledge that the core of the problem lies with the Republican Party.

When one party moves this far from the mainstream, it makes it nearly impossible for the political system to deal constructively with the country’s challenges.

“Both sides do it” or “There is plenty of blame to go around” are the traditional refuges for an American news media intent on proving its lack of bias, while political scientists prefer generality and neutrality when discussing partisan polarization. Many self-styled bipartisan groups, in their search for common ground, propose solutions that move both sides to the center,a strategy that is simply untenable when one side is so far out of reach.

Yes, false balance is “simply untenable” these days, when one side is so “far out.” This, of course, is especially true in the case of the climate debate:

We understand the values of mainstream journalists, including the effort to report both sides of a story. But a balanced treatment of an unbalanced phenomenon distorts reality. If the political dynamics of Washington are unlikely to change anytime soon, at least we should change the way that reality is portrayed to the public.

Our advice to the press: Don’t seek professional safety through the even-handed, unfiltered presentation of opposing views. Which politician is telling the truth? Who is taking hostages, at what risks and to what ends?

Also, stop lending legitimacy to Senate filibusters by treating a 60-vote hurdle as routine. The framers certainly didn’t intend it to be. Report individual senators’ abusive use of holds and identify every time the minority party uses a filibuster to kill a bill or nomination with majority support.

The article has much more to say about how the Republican Party at the national level has veered sharply to the extreme and how the Democrats have become “more of a status-quo party”:

Republicans often dismiss nonpartisan analyses of the nature of problems and the impact of policies when those assessments don’t fit their ideology. In the face of the deepest economic downturn since the Great Depression, the party’s leaders and their outside acolytes insisted on obeisance to a supply-side view of economic growth — thus fulfilling Norquist’s pledge — while ignoring contrary considerations.

The results can border on the absurd: In early 2009, several of the eight Republican co-sponsors of a bipartisan health-care reform plan dropped their support; by early 2010, the others had turned on their own proposal so that there would be zero GOP backing for any bill that came within a mile of Obama’s reform initiative. As one co-sponsor, Sen. Lamar Alexander (R-Tenn.), told The Washington Post’s Ezra Klein: “I liked it because it was bipartisan. I wouldn’t have voted for it.”

And seven Republican co-sponsors of a Senate resolution to create a debt-reduction panel voted in January 2010 against their own resolution, solely to keep it from getting to the 60-vote threshold Republicans demanded and thus denying the president a seeming victory.

This attitude filters down far deeper than the party leadership. Rank-and-file GOP voters endorse the strategy that the party’s elites have adopted, eschewing compromise to solve problems and insisting on principle, even if it leads to gridlock. Democratic voters, by contrast, along with self-identified independents, are more likely to favor deal-making over deadlock.

Democrats are hardly blameless, and they have their own extreme wing and their own predilection for hardball politics. But these tendencies do not routinely veer outside the normal bounds of robust politics. If anything, under the presidencies of Clinton and Obama, the Democrats have become more of a status-quo party. They are centrist protectors of government, reluctantly willing to revamp programs and trim retirement and health benefits to maintain its central commitments in the face of fiscal pressures.

Precisely.

But again, the authors are clear on who is to blame for the gridlock that threatens to ruin the health and well-being of future generations:

Today, thanks to the GOP, compromise has gone out the window in Washington. In the first two years of the Obama administration, nearly every presidential initiative met with vehement, rancorous and unanimous Republican opposition in the House and the Senate, followed by efforts to delegitimize the results and repeal the policies. The filibuster, once relegated to a handful of major national issues in a given Congress, became a routine weapon of obstruction, applied even to widely supported bills or presidential nominations. And Republicans in the Senate have abused the confirmation process to block any and every nominee to posts such as the head of the Consumer Financial Protection Bureau, solely to keep laws that were legitimately enacted from being implemented.

In the third and now fourth years of the Obama presidency, divided government has produced something closer to complete gridlock than we have ever seen in our time in Washington, with partisan divides even leading last year to America’s first credit downgrade.

On financial stabilization and economic recovery, on deficits and debt, on climate change and health-care reform, Republicans have been the force behind the widening ideological gaps and the strategic use of partisanship.In the presidential campaignand in Congress, GOP leaders have embraced fanciful policies on taxes and spending, kowtowing to their party’s most strident voices.

But while more and more people are recognizing the reality of the Tea Party driven extremism that has captured an entire political party, the prognosis in the near term isn’t very good.

Mike Lofgren, a veteran Republican congressional staffer, wrote an anguished diatribelast year about why he was ending his career on the Hill after nearly three decades. “The Republican Party is becoming less and less like a traditional political party in a representative democracy and becoming more like an apocalyptic cult, or one of the intensely ideological authoritarian parties of 20th century Europe,” he wrote on the Truthout Web site.

Shortly before Rep. West went off the rails with his accusations of communism in the Democratic Party, political scientists Keith Poole and Howard Rosenthal, who have long tracked historical trends in political polarization, said their studies of congressional votes found that Republicans are now more conservative than they have been in more than a century. Their data show a dramatic uptick in polarization, mostly caused by the sharp rightward move of the GOP.

If our democracy is to regain its health and vitality, the culture and ideological center of the Republican Party must change. In the short run, without a massive (and unlikely) across-the-board rejection of the GOP at the polls, that will not happen. If anything, Washington’s ideological divide will probably grow after the 2012 elections.

In the House, some of the remaining centrist and conservative “Blue Dog” Democrats have been targeted for extinctionby redistricting, while even ardent tea party Republicans, such as freshman Rep. Alan Nunnelee (Miss.), have faced primary challenges from the right for being too accommodationist. And Mitt Romney’s rhetoric and positions offer no indication that he would govern differently if his party captures the White House and both chambers of Congress.

While the authors put some of the blame on the media, they end by saying:

In the end, while the press can make certain political choices understandable, it is up to voters to decide. If they can punish ideological extremism at the polls and look skeptically upon candidates who profess to reject all dialogue and bargaining with opponents, then an insurgent outlier party will have some impetus to return to the center. Otherwise, our politics will get worse before it gets better.

The only things missing in the piece is the role of money in politics and a downplaying of the role of the conservative media in stoking the extremism. But as a short diagnosis of what ails U.S. politics, it is one of the best recent pieces, particularly considering the credibility the authors.

I agree 100%. Since even some conservatives are now admitting that the Republicans are the problem, perhaps the more reasonable Republicans will being to be able to take back their party from the extremists within their own ranks. I'm not sure a 2 party system is sustainable when one of the parties gets taken over by its most extreme elements.

Rand Paul was detained by the TSA back in January, which caused him to miss a scheduled speech at a March for Life rally in Washington, DC. So, you could say that government intrusion prevented him from promoting ... a different kind of government intrusion.

But, still, in spite of the fact that I disagree with practically everything Rand Paul stands for, it's good to see that existential hatred for the TSA crosses all political boundaries - maybe that means something will actually happen to fix the TSA's destructive effect on American liberties, sooner or later.

Thursday, May 3, 2012

What does this chart show? It demonstrates that from WWII until about 1973, average workers in the USA shared in the benefits and reaped the fruit of their own increased productivity.

It also shows the extent to which, for most people, the economy broke in 1973. The fundamental bargain that underpinned the American dream - "if you work harder, you'll proposer" - simply stopped being true.

“The big shift is really in the ’80s, which I would attribute to [Fed Chairman Paul] Volcker’s recession in 1980-82, which killed workers,” said Dean Baker, co-founder of the Center for Economic and Policy Research, who hasconducted similar studies. “A high dollar in the mid-80s amplified this effect. You also had the anti-union policies of the Reagan administration.”

Since then, public policy has exacerbated the problem,accordingto EPI President Larry Mishel. “The continuing growth of the wage gap between high and middle earners is the result of various laissez-faire policies (acts of omission as well as commission) including globalization, deregulation, privatization, eroded unionization, and weakened labor standards,” he writes. “The gap between the very highest earners — the top 1 percent — and all other earners, including other high earners, reflects the escalation of CEO and other managers’ compensation and the growth of compensation in the financial sector.”

This isn’t a global problem, either. Some major economies — the UK and Canada — have experienced similar shifts, but others, including France and Italy, did not, according to Baker.

The consequences of not restoring the link — and, thus, a rising standard of living for most workers — are grim, and point to either persistent sluggish growth or recurring asset bubbles. But to accomplish this, Mishel argues, will require divisive policy shifts impossible in the current political climate. “It is hard to see how reestablishing a link between productivity and pay can occur without restoring decent and improved labor standards, restoring the minimum wage to a level corresponding to half the average wage (as it was in the late 1960s), and making real the ability of workers to obtain and practice collective bargaining.”

Simply put, the economy broke for most people in the 1970s, and the fundamental bargain underpinning the American dream was betrayed. I don't know if it will be possible to restore, and I fear for the future of the country if workers continue not to earn their fair share.

About This Blog

I am one of the largely nameless, faceless bureaucrats who work tirelessly (and largely thanklessly) to help ensure that poor people don't go hungry - and a billion other tasks government bureaucrats do that no one notices until something stops working. Living and working in DC is making me angry - and I vent my anger as thoughtfully as I can. Well, OK, maybe I'm not terribly angry ... but I thought it was a good name for a blog. If you're also a bureaucrat, or angry, or thoughtful, I'm happy to entertain guest posts.